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Apr 9, 2020

Types of users a product can have

Contrary to the intuition, not every user of your product is a good user.


Some users are good only in long term (checkout how long it takes Evernote to convert a typical freemium user into a paid user) and hence there are no instant revenue streams from them.

Some may provide free marketing (by referring or by word of mouth), but will never pay for the product. These users can be useful for viral marketing, specially the ones with large followers, but they will never contribute to the revenue stream directly. 


Some are not good at all.


It is important to segment key good users from the bad users and focus on developing and evolving the product only for the good ones.


We need to weed out the bad ones. Sometimes, this may mean asking for card details upfront on user registration. Other times, it may be more of a passive approach such as not sending engagement emails to the ones who are already inactive.

Segmenting real users from casual ones also depends on how much effort your users have to put into using the application. If it takes a lot of effort to set up a system for a user, then probably the user has some pretty good gain or incentive to use the product. This makes the user more valuable to the product and more probable to be a direct contributor in the revenue stream of the product.
Also, users can be monetized depending on how much they are engaged with the product.

Predicting revenues accurately relies on an understanding of how its different user segments employ the product.

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